Color Print Migration Market Update
Madison Advisors released its Color Print Migration Market Update report in November 2017. This report documents the results of our latest research in the print and mail industry and is specifically focused on the migration of monochrome to full color of transactional communications for both enterprise in-plants and print service providers. Our first color migration research was conducted in 2011 and revealed that the use of full color for transactional communications was less than one in five images. This latest research, which represents data collected for the calendar year 2016, indicates that while adoption of color has grown over the last five years, it was not as fast as anticipated.
The introduction of the color inkjet printer changed the world of print, and color inkjet technology offers the printing industry boundless opportunities. While the price point for a color image has decreased to a significantly attractive level, the increase in adoption for transactional communications has not been as impressive. However, the good news is that it’s getting better. The printing industry has been rife with analyst predictions about its demise, and the introduction of email and more recently other digital delivery mechanisms have fueled those beliefs. Despite the dip in USPS mail delivery volumes - down approximately 2.2% in 2016 from the previous year - print is certainly not dead. In fact, we believe it will experience a revival thanks to the color inkjet technology available in the market today.
Deploying color inkjet printer technology can offer a print service provider or enterprise in-plant many benefits such as better output quality at faster speeds and a streamlined production process, to name a few. Unfortunately, as experts in the industry can empathize, it is not as simple as swapping out old monochrome toner-based equipment with a shiny new engine. There are many considerations that come into play and challenges to overcome to create a successful color inkjet strategy. This strategy should not be one that is solely determined by print operations or IT, but a strategy that needs to involve the entire organization to ensure its success.
The business to consumer (B2C) transactional print industry can reap numerous opportunities through the use of color inkjet technology. With the existing capabilities available in the market today, longevity of the engines, and the lower capital investment needed to acquire this technology, it is no longer a nice-to-have, it is a must-have. The transactional print data collected for our research revealed that 38% of the total image volume was produced in color, which means that there is still room for growth.
To conduct this research, Madison Advisors obtained image volume data from 22 organizations from both the print service provider and in-plant markets. We classified image volumes by monochrome and color and by vertical. The following highlights reflect our findings.
Use of Monochrome Exceeds Color
Of the 39.78 billion images produced by the participants in our research, 62% of those images were monochrome. Today, the cost of entry into color inkjet technology is lower than when first introduced. Enterprises and print service providers who currently lack or have limited color capability and are in need of an equipment refresh should strongly consider making the investment. By doing so, service providers can attract more clients, and enterprise in-plants can improve the appearance of customer communications and potentially bring in work such as marketing collateral that was previously outsourced to a third party.
Adding color to transactional communications increases brand recognition and creates synergy between print and digital communications with a consistent look and feel. Despite the focus on digital transformation and creating digital experiences as a part of a multi-channel customer communications strategy, it is critical to consider the important role print can play. Print can be used to drive consumers to a digital channel with website information, QR codes that can be scanned with a mobile app, or personalized URLs (PURLs). These “cross-channel” interactions increase engagement and enhance the customer experience by allowing consumers the opportunity to engage with a brand through their preferred channel. 12
Use of Color Is Not Volume Dependent
Higher production volumes did not necessarily indicate greater use of color for both print service providers and in-plants. In fact, the Tier I service providers, whom Madison Advisors classified as those whose annual production volumes were greater than 5 billion, had the lowest percentage of color on average when compared to Tier II (1-5 billion) and Tier III (< 1 billion) service providers. The service providers with a higher concentration of clients in verticals such as retail/credit card and banking produced a higher percentage of color output.
Some Verticals Still Lag Behind Others
In 2016, approximately 38% (15 billion) of the total image volume produced by the print service providers and in-plants who participated in this research were in color. Insurance and healthcare still continue to lag, but our latest research indicates that there has been an increase in the volume of color output for these verticals since our last study.
Although print has become commoditized, print service providers and in-plants alike need to establish a color inkjet strategy that adds value for clients and internal business lines, and emphasizes the role that print can play in an omni-channel communications strategy. Recently, there has been a great deal of emphasis on digital transformation and creating the desired digital experiences that consumers demand. However, despite the availability of various digital channels, print is making a strong comeback. As organizations work to develop an omni-channel customer communications strategy, the significant role that print can play in that strategy needs to be considered.
Madison Advisors continues to monitor the print and mail industry and our Color Print Migration Update 2017 is a continuation of our research efforts. We anticipate that transactional B2C communications will continue to migrate away from monochrome to full color, and that digital transformation strategies may fuel that growth. As the data reveals, there is room for growth - and with growth comes opportunity.
The full report may be purchased at this link: www.madison-advisors.com/product/color-print-migration-market-update-2017/
Gina Ferrara is a senior analyst with Madison Advisors and provides advisory services to organizations in service provider and financial services industries. She focuses on helping organizations achieve their strategic customer communications management (CCM) goals and objectives and provides consulting services related to best practices for print and mail operations, postal optimization and address quality, and multi-channel delivery. Ferrara routinely helps clients with a variety of matters, including managing requests for proposals (RFPs) for print outsourcing and CCM hosted managed services, as well as conducting best practice assessments for enterprise and service provider clients.